EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.

SAN FRANCISCO - Pacific
Gas and Electric Company issued the following statement after the
California Public Utilities Commission (CPUC) released its draft
decision on the California Department of Water Resources revenue
requirement. The CPUC proposal comes more than a week after its
scheduled release and after CPUC commissioners held a press conference
to discuss its contents.

"After eight days of waiting,
the public will finally be given an opportunity to review the CPUC's
proposed revenue requirements. The document sheds no light on why
the CPUC suddenly wants to shift $600 million - not just the $500
million the Commission claimed last week - in unsubstantiated DWR
power costs onto our customers, from Southern California customers,
over the next year. This shift would appear to mean that for the
next ten years, PG&E's customers would pay 40 to 55 percent higher
rates for DWR power than customers of Southern California Edison
and San Diego Gas & Electric - a discriminatory price difference
that will quickly add up to billions of dollars.

"The CPUC announced its
new funding scheme last week without releasing any details or information
to support this discriminatory pricing structure. The justification
offered by CPUC commissioners and staff - that DWR's cost of electricity
in Northern and Central California is higher than in Southern California
- is directly contradicted by the facts:

For the three years
prior to the current crisis, prices in Northern California were
no more than 11 percent higher on average than comparable prices
in Southern California.

Current price curves
for longer-term electricity contracts show that forward prices
for power delivered in Northern California actually are slightly
lower, not higher, than comparable prices for power delivered
in Southern California.

With much fanfare, two
major plants have been opened in the past two months in Northern
California - the Sutter Energy Center and the Los Medanos plant
in the Bay Area - and will provide over 1,000 mW, enough electricity
to power 1 million Northern California homes. These efficient
power plants are providing additional resources in Northern
California, and thus should mitigate any alleged transmission
constraints between Southern and Northern California.

"Pacific Gas and Electric
Company renews its request that the CPUC not adopt this proposal
until a public hearing is scheduled which will allow customers and
other interested parties to examine DWR's revenue requirement."